Deinonychus antirrhopus

So, can we cut to the chase here? What is Kevin's point, beyond "we're running out of oil (maybe)?"

No, you are not 'running out of oil' You are running out the ability to produce oil in the quantities you need, which is the issue.

It is like looking in your bank account and discovering you don't have enough income to pay all the bills. You still have 'money', just not enough of it. Something has to give, and it is your lifestyle.

Hubbert was 'right on' with his prediciton of 2000 as the 'peak' year. Had it not been for the artifical 'shortage' created by the Saudis in 1973, when they cut off oil in the 'oil shock', the world would have continued consuming and the growth in oil consumption would likely have caused a peak in 2000. What happened was a massive conservation program, that cut back energy use in the USA tremendously - tighter insulation requirements on homes, CAFE gas mileage standards for cars, etc. Most of that out the window now that cars each year get WORSE gas mileage than before.

You might read SImmon's new book, Twilight in the Desert (just published) to get some perspective, and Kenneth Defeyes new book, Beyond Oil, to get an understanding and update on the Hubbert Peak.

Our entire economy and financial system depends upon every increasing GROWTH in industry, GDP, and energy usage. Conservation is not something that the markets want to hear. Companies making less. Consumers consuming less. Governmentsn collect less taxes.

All that debt needs to be repaid back, and preferrably with 'cheaper' dollars and from ever increasing tax revenues.

The 'elasticity of demand' for oil (which is the difference in price to affect a change in demand) is very high. It takes a 10% rise in price to reduce demand by just 1%. Folks will continue to use oil (and recently released statistics show consumers used MORE oil this year despite 50% higher prices) as they consider it essential to their lifestyle.

IT will take a doubling and tripling in gas prices just to drop demand by 10%.

After the peak of oil production, demand will likely still be increasing worldwide do to industrialization, yet the supplies will decline by 2-3% annually, compounded. After ten years, you'll be paying $10 or $15/gallon.

If you think the economies worldwide will survive on $15/gas for long (and other energy sources will rise in step - coal and natural gas), we're reading different economic books. If you think airlines and auto industries will survive, I"ll bet you bucks they won't.

That is the likely aftermath of 'peak oil'. We have been burning through stored fossil fuel sources - and they all will be peak and be gone by the time newborns today are senior citizens.

Every 'new' technology has taken 20-30 years to implement. The clock is running, and you are likely 10-20 years too late in developing, on a mass scale, your next 'energy source' whatever it may be.

Steve's resort to entirely inapt technological innovations comparisons (who saw the cell phone coming???? good grief!!) to hand-wave off the peak oil theory shows the kind of wishful thinking his rebuttal requires.

See, MAYBE, some technology nobody knows about now will keep the extraction levels of depleting reserves as high or higher than they are now? Since amazing things have happened that nobody foresaw, this is supposed to be a reasonable response to Drum or peak oil theories?

It seems clear enough that oil extraction is a case of diminishing returns, and ever higher marginal costs of production, as the most easily and most economically obtained reserves have been taken first, and those remaining require much more capital resources, technologies, etc. to even begin to happen. How it can be imagined that they could eventually be scaled up to current production standards seems to me like thinking you could run the Iditerod (sp?) marathon huskie dog team sled race with a team of Yorkies, if you only whipped them enough.

Even assuming one could get the same production levels out of the secondary, tertiary, and beyond, oil sources, the NET would be considerably less, because of how great the energy requirement would be to run that process, probably eventually requiring more energy input than the oil derived would provide, or costing too much to be economically viable well before that point was reached. That is, to be sure, barring some abundant and cheap energy source like commercial scale fusion, which might be able to supply such a huge input of energy to such efforts that huge amounts of oil could be recovered, although if that were available, the oil would probably be quite obsoleted for energy generation purposes (maybe still important for plastics or pharmaceuticals or fertilizers).

Needless to say, whale oil's replacement by kerosene does not address the specific question of peak oil whatsoever. It changes the subject. Had there been a breakthrough in whale husbandry or genetics, farming these animals in huge numbers to provide a vast and ever increasing supply of an apparently before limited and dwindling natural supply, that might be a point that better addressed this issue. Not really in that case, either, because whale oil, while finite at any given time, is renewable.

The post above is the full scale worst case analysis of what peak oil may mean. However, what the non-hysterical, non-liberal, non-Malthusian Goldman Sachs (or whomever in the top level banking community it was) predicts, oil prices imminently spiking and staying at the $100 to $150 a barrel price, will cause dislocations and normal market breakdowns that are quite severe enough.

To say, well, a severe world-wide depression will bring down those prices, while maybe true, is not really a rebuttal to the severe consequences predicted, but a presumption they are true. To say society will cope, with rolling black or brown outs, legally mandated thermostat settings, rationing, gas lines, etc., is also to admit the consequences one is denying, it seems to me. The 'peak oil is probably wrong, or if true, unimportant, as things will go along pretty much as other technologically revolutionary times, which would be obvious to anyone who understood economics and history'-theorists, must be talking about a relatively smooth transition, without major market dislocations or breakdowns, or else they are making a nonsensical point. Could that be true? Sure, a transition, but a mere speed bump, nothing critical, in whatever may happen to oil? Well, perhaps, but it seems that is a blind faith position for which an alternative scenario is lacking.

Now, to be sure, this theory may be wrong in its particulars. I am not sure why the production of oil fields should necessarily top out at around half their total recoverable reserves, even given the additional efforts required once their easily recovered fractions are run through. It isn't clear why, or even if, when possible production diminishes, the reserves are half depleted. Frankly, one might imagine that any given fraction could be run through before production would necessarily decline. The old 80/20 rule comes to mind, just as a rule of thumb.

Unfortunately, that might mean that if we have definite downturns in other oil producing fields, they may be MORE than half depleted. As of now, the confirmation data set for the strong version of the peak oil thesis is limited to a handful of cases at most, or, and maybe Steve is right on this, not even once.

Ummm...what's a "complete Hubbert cycle", and is it possible for one to have occurred without requiring t->infinity?

Steve,

Maybe I don't quite understand the probabilistic logic reasoning which will lead us to a brillant energy future with total certainty.

Or, maybe you mean that, "a market economy" will work in every situation for all the eternity, because probabilistic logic says so??

So, it is not only that the market is the most efficent resource allocator, IT WILL SOLVE EVERY SCARCITY EVERYTIME.

I think that that affirmation means P(A) = 1

So, do you think that the market will solve every scarcity forever, not only eficient allocate goods?

Fernando

Well I guess that when the last oily molecule has been oxidized, we will have been through a complete Hubbert cycle for oil. But actually it can never happen with minerals that can dissolve in seawater. Theoretically one could recover gold from seawater given sufficient energy.The physicist Charles Galton Darwin published THE NEXT MILLION YEARS in the early 50's. He postulated that it was actually more difficult to speculate about the short term than the long term. It has been some time since I read this book but I doubt that he expected all fossil fuels to be burned, even in a million years.

The Hubbard curve shape seems wrong to me. Oil production will rise as he expected, but intuitively to me it seems like it should slowly tail off instead of fall as quickly as it rose.

As more wells are drilled, I understand the front side of the curve, but as the easy liquid oil becomes scarce, wouldn't that be replaced by the harder to get (or reprocess) oil (tar sands, well that need salt to be removed, sourer crude deposits, etc). To me this seems like it would cause oil production to slowly tail off instead of crash.

So maybe wa have hit the peak, but that doesn't mean the back end of the curve looks anything like Hubbard predicted.

Re: "Did anybody forsee the internet becoming what it is today back when it was first being suggested/discussed?"

(Just because you always to have to take a shot this open even if it is entirely unrelated) Darling of the left Krugman certainly didn't when in 1998 he wrote: "By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s." (From Jim Glass's site)

No, you are not 'running out of oil' You are running out the ability to produce oil in the quantities you need, which is the issue.

"Want" not "need". As the price of oil increases, the "need" for it decreases.

Every 'new' technology has taken 20-30 years to implement. The clock is running, and you are likely 10-20 years too late in developing, on a mass scale, your next 'energy source' whatever it may be.

Then it is fortuitous that a lot of the technologies we will use have been around a lot longer than 20-30 years. For example, coal liquification has been around since at least the 1930's. On the electricity side, we have electric cars at the begining of the 20th century, wind and solar power (the latter is a relatively new technology as only being a few decades old).

Frankly, , I'm not even sure we're seeing the begining of a genuine rise in the inflation-adjusted price of oil. Maybe this is just bias in our measures of inflation? What is the history of the price of oil in inflation-adjusted Euros?

Coal liquification has been around for 60 years (the Germans used in in WW2) but you neglect another fact. THere seems to be about 30-35 years of 'net energy' coal left in the USA. And we are 1 of the 2 top places in the world with coal, the other being China. That doesn't buy you much time, assuming you could ramp up production even more in coal mines, and build processing plants. By the time you have enough, the coal will begin to run out (The coal that takes less energy to recover than it produces).

There is no 'mystery' into oil depletion. There are over 10,000 oil fields in the world, and with about a 1 in 300 exception ratio, when 50-55% of the oil has been removed, the production rate drops, no matter what you do...secondary, tertiary recovery. All that does is preserve the peak production for a few years, then the drop off is even steeper.

Oil doesn't sit in vast underground caverns, just waiting to be removed. It sits in complex geological formations. The easy oil comes out first. Later, it takes more and more effort to get the oil from further away, and a good deal of it can never be recovered, simply because it won't flow uphill to wells, or is in types of rock where it can't flow freely.

History has repeated itself over a thousand times, as oil fields have 'peaked' and declined.

As to new technologies, I sure don't see any ready to be deployed on the mass scale required. You see any solar airplanes, or airplanes flying on hydrogen? (prototypes have been flown in the past by the military - took up all the space in side for the tanks).

The 'magic answer' from economists is that scarcity will 'provide' an answer. Really? Tell that to the millions who starve each year from lack of food. Surely they have a scarcity! They just can't afford the food at the current price.

When energy gets more expensive, larger and larger segments of the population won't be able to afford the food grown by fossil fuel fertilzers and cultivated and irrigated by fossil fueled waterpumps and tractors and cultivators, hauled by fossil fueled trucks to market, etc. You'll see folks freezing to death in their homes, unable to afford the heating oil to keep warm.

Oh, just $4/gal for gas, and about the same for heating oil? Now your winter heating bill in MN might be $4000-5000/yr? Or your A/C bill in AZ might be $4000/yr?

Then wait till it is $8/gal.

It all comes down to 'cheap energy' and 'net energy'.

THe world economies are built on cheap energy. Our modern USA type society is build upon having all the fuel we need at low prices.

As the 'cheap energy' sources depelete, with no alternates available that are 'as cheap', there will be tremeoundous distruptions.

When farmers start to 'profit maximize' rather than grow 'maximum food', (which is what the economists would recommend) and there isn't enough to go around, then what?

When oil companies start to 'profit maximize' rather than pump all the oil that customers demand, then what? (hey, that is what the economists would tell you is correct).

Your 'solar dryer' (ie, clothesline) might come in handy. As well as your old 'hand crank' washing machine, your 'manual' dishwater (sink and wash cloth), and your 'flow through' ventilation to replace your A/C even when 100 deg might come in handy.

Coal liquification has been around for 60 years (the Germans used in in WW2) but you neglect another fact. THere seems to be about 30-35 years of 'net energy' coal left in the USA. And we are 1 of the 2 top places in the world with coal, the other being China.

I think you're off by a century or two of supply of "net energy" coal.

That doesn't buy you much time, assuming you could ramp up production even more in coal mines, and build processing plants. By the time you have enough, the coal will begin to run out (The coal that takes less energy to recover than it produces).

How much time do we really need? You were saying 20-30. We get more than that with coal, I think a lot more.

When energy gets more expensive, larger and larger segments of the population won't be able to afford the food grown by fossil fuel fertilzers and cultivated and irrigated by fossil fueled waterpumps and tractors and cultivators, hauled by fossil fueled trucks to market, etc. You'll see folks freezing to death in their homes, unable to afford the heating oil to keep warm.

I did a little research here. Fossil fuel fertilizers depend primarily on natural gas as a hydrogen source which in turn is attached to atmospheric nitrogen to make ammonia, the key component of fertilizers that comes from fossil fuels. Natural gas in turn is a bit more prevalent than oil and hence won't deplete at the same time. Second, if the economy in question switches to a hydrogen economy with more or less cheap hydrogen available, then fertilizer production can continue unabated.

Further, nitrogen fixing via legumes (clover, alfalfa, peas, etc) contributes more to US agriculture than fertilizers.

Oh, just $4/gal for gas, and about the same for heating oil? Now your winter heating bill in MN might be $4000-5000/yr? Or your A/C bill in AZ might be $4000/yr?

I doubt these figures. First, electricity costs are only modestly dependent on oil. Second, winter heating has several alternatives including electricity, natural gas, and wood. Some of these take little effort to install. Third, people can cut back. Demand is a lot more elastic than you are implying.

Then wait till it is $8/gal.

I believe you overstate the consequences of $4/gal gasoline, much less $8/gal. After all, we experienced sudden shifts in oil prices in the 70's of this order of magnitude. It wasn't pretty, but it didn't lead to the type of harm you are forecasting.

For me, the bigger concern is how rapidly we switch in expectations from cheap oil to expensive oil. Are we prepared or surprised? Ie, if the oil infrastructure in the Middle East gets nuked without warning with say, cobalt seeded bombs, that's a sudden change in expectations. But if we see a gradual shift over many years, then we handle quite a large change in oil prices.

Your viewpoint seems to depend on a sudden massive shift occuring. While that is a risk that we should insure against, I don't see it as being likely.

"Every 'new' technology has taken 20-30 years to implement. The clock is running, and you are likely 10-20 years too late in developing, on a mass scale, your next 'energy source' whatever it may be. "

Well, it's a good thing that we knew how to build nuke plants 30 years ago.

The idea that scarcity will spur investment in alternatives is sounds... except for the caveat "if people are allowed to use them". Nuclear fission could power civlization for the next few centuries, but an awful lot of people freak out at the very mention of it.

If we return to the Dark Ages for lack of nuke plants, future generations will get a very dramatic lesson in the drawbacks and pitfalls of representative government.

Hubbert was 'right on' with his prediciton of 2000 as the 'peak' year. Had it not been for the artifical 'shortage' created by the Saudis in 1973, when they cut off oil in the 'oil shock', the world would have continued consuming and the growth in oil consumption would likely have caused a peak in 2000.

Which is precisely my point. Hubbert wrong because his curve misses things like the 1970's and high oil prices due to the actions of a cartel.

Our entire economy and financial system depends upon every increasing GROWTH in industry, GDP, and energy usage. Conservation is not something that the markets want to hear. Companies making less. Consumers consuming less. Governmentsn collect less taxes

Markets don't hear anything, people do. And this is just ridiculous. Sure right now when oil is cheap you don't see much conservation...it is cheap after all. As the price rises it will be conserved. The only problem is if the government steps in to some how try and keep the price from rising.

After the peak of oil production, demand will likely still be increasing worldwide do to industrialization, yet the supplies will decline by 2-3% annually, compounded. After ten years, you'll be paying $10 or $15/gallon.

If oil is going to be that high, why not look for an alternative? Think of the wealth that could be had. It would be massive if one could find the solution, if it doesn't already exist, first. You assume that as prices rise, and that the prospect of future high prices is doing nothing in terms of researching new alternatives or improving existing alternatives.

Fernando,

So, do you think that the market will solve every scarcity forever, not only eficient allocate goods?

First, I'd sue your third grade teacher for failing you so miserably in regards to reading comprehension? Exactly where did I say that probabilistic reasoning and the market will work everywhere and anywhere? You provide the quote and I'll paypal you $5, okay?

Steve's resort to entirely inapt technological innovations comparisons (who saw the cell phone coming???? good grief!!) to hand-wave off the peak oil theory shows the kind of wishful thinking his rebuttal requires.

Seriously Sofla, does it hurt you or something to accurately protray my arguments? Just curious, because the post immediately below this one does not dispute the idea of the Hubbert curve, but merely questions it applicability to policy forumlation, especially in terms of a national strategy for managine non-renewable resources.

See, MAYBE, some technology nobody knows about now will keep the extraction levels of depleting reserves as high or higher than they are now? Since amazing things have happened that nobody foresaw, this is supposed to be a reasonable response to Drum or peak oil theories?

Again, not my argument, at least not in its entirety. Sure new technologies might postpone the peak, but eventually usage will peak.

It seems clear enough that oil extraction is a case of diminishing returns, and ever higher marginal costs of production, as the most easily and most economically obtained reserves have been taken first, and those remaining require much more capital resources, technologies, etc. to even begin to happen. How it can be imagined that they could eventually be scaled up to current production standards seems to me like thinking you could run the Iditerod (sp?) marathon huskie dog team sled race with a team of Yorkies, if you only whipped them enough.

Again, not my argument, so a false analogy. I don't doubt that at some future date we will no longer use oil. My contention is that we will use something else, not merely that the oil will last forever which is what you're claiming is my position.

Ummm...what's a "complete Hubbert cycle", and is it possible for one to have occurred without requiring t->infinity?

Well, the mathematical model requires t -> infinity, but a complete cycle would be when there is so little left that we just can't get it. Basically we are a good ways out there on the right hand tail. My contention is that prior to this an alternative will be found and we'll switch. The difficulty for me is what? I don't know. But even if I did, I wouldn't tell anybody here, I'd keep that information to myself and try to become filthy stinking rich.

This is always the problem those face who oppose the doomsters. They say, "Doom is upon us because of X." Those who disagree say, "I'm not worried, such things have been prophisized in the past and have failed to come about." The Doomsters respond with, "What exactly will save us?!?!"

It is like the anti-evolutionists. What is the exact pathway that X evolved? You don't know it? Ha! Evolution is a fraud.

Doom, IMO, is a nice clarion call to action...towards giving up freedoms, liberties, and so forth all in the name of preventing the catastrophe. "We must all do without (well most of us, those of us with enough money or connections will continue as if nothing has changed)." Funny how the Lefties who scream about the percieved tyranny of the Patriot Act, the Bush Administration, etc. Seem to have no problem with surrendering freedoms due to some dubious forecasting.

The 'magic answer' from economists is that scarcity will 'provide' an answer. Really? Tell that to the millions who starve each year from lack of food.

Bob, really. Did you have to resort to this misinformation. You really telling me the starvation in the world is simply a matter of there not being enough food. Sorry, it is a political/distribution issue. Starvation is a great weapon.

When farmers start to 'profit maximize' rather than grow 'maximum food', (which is what the economists would recommend) and there isn't enough to go around, then what?

When did you stop beating your wife? Sheesh, got anymore loaded questions? Tell you what, why don't you sit down and figure out at least theoretically, why profit maximizing farming would result in mass starvation. Oh, and don't forget to use futures markets. I'd suggest modelling those as a martingale.

I believe you overstate the consequences of $4/gal gasoline, much less $8/gal. After all, we experienced sudden shifts in oil prices in the 70's of this order of magnitude.

Quite right. Bob, why don't you take the gasoline prices at their peak back during the late 70's and bring them into current dollars. I believe you'll find the cost near something like $3/gallon or more. Obviously armaggeddon did not result.

Ok. Add "almost" in front of "everytime" and "every where".

You (and a lot of economists, by the way) are saying that not only the market allocate goods efficiently but it finds a way for "generating" goods (by substitution, for example) -almost- always.

I would be more comfortable if they said "markets allocate goods efficiently but they don't create things out of nothing"

And one more thing. Energy is everywhere, everytime in our lives. You substitute copper because you have LOTS of energy for researching and prospecting. "Haven't find a substitute, yet? Throw some more energy, please". Energy is THE enabling factor.

From
http://www.steveverdon.com/archives/energyeconomics/002262.html

"And as for the view that peak oil believers are cranks; the reason for this is that so far there has not been a single case of any commodity going through a complete Hubbert cycle in the sense that we don't switch to something else. There have been peaks in the production of a great many commodities many of which are finite in the same sense that crude oil is finite. Yet the end of the world has not occured. One reason is that as the price goes up for whatever good is being used up, the price of previously uneconomical substitutes becomes relatively cheaper. Also, looking for subsitutes becomes relatively cheaper as well. For example, whale oil in the mid 1800's had a price (in current dollars) that makes oil look like an unbelievable bargain. Then the kerosene lamp was invented and the impact on the whaling industry was almost immediate. By 1860 at least 30 kerosene plants were in production in the U.S. and whale oil was eventually driven off the market.

Some say that this kind of thing is just dumb luck. Really? What about the replacement of labor on farms by machinery?"

From http://www.outsidethebeltway.com/archives/10827#comment-47929

"Blind faith in human progress. That pretty much sums up the basis of your argument. You admitt that you have no idea what will replace oil, yet you arent worried."

Yep, I have no idea. Just as somebody in 1992 had no idea that the internet/tech bubble was coming. Also, many people during the last oil crisis believed we’d see oil at $100/barrel. That is how they justified spending billions on nuke plants. That we can’t see the future in specific terms is pretty much a given. But we can see trends and common elements in different situations.

"So of course, since this has always worked before, it will always work in the future, even though we dont have any idea what this replacement will actually be. There is no scientific basis behind this logic, just blind faith that the future will always follow what happened in the past."

Not quite. There is a logic, it is a probabilistic logic. Think of it this way, we have an event, E, that could be bad or good. Now, given the past history with similar events the question is how do we update the probability,

Prob(Bad|E) and,
Prob(Not Bad|E).

That is, how do we formulate Prob(Not Bad|E, K) where K is the vector of previous instances where the market has “bailed us out”.

Lets look at some other doom-n-gloom scenarios. Remember the nuclear war over food? Oh…yeah I forgot that doom-n-gloom prediction completely and totally failed to materialize. Let me see what else was there, how about the first oil crisis? The Saudis were going to be incharge of everything. New world order and all that rot. How come we haven’t run out of copper?

" Maybe you should try looking a little farther back in history than ~150 years. You will find plenty of examples of civilizations that faced a crisis, failed to overcome it in spite of all efforts, and collapsed."

Sure, I don’t discount that probability, I don’t set it to zero, I’m just ready to set it to 1 either . Sure we could go back further and look at older civilizations that didn’t have the technology nor the market structure we have today. Seems to me these analogies may not be all that great either.

And one more thing. Energy is everywhere, everytime in our lives. You substitute copper because you have LOTS of energy for researching and prospecting. "Haven't find a substitute, yet? Throw some more energy, please". Energy is THE enabling factor.

Oh please. Not it is NOT. Lets also add labor and human capital. You don't from flint tipped spears one day to cars, jets, and cell phones the next. Is energy important, sure who has argued otherwise? Nobody. Is it the most important factor, no? Not if you mean that it is the only factor that is necessary.

" Maybe you should try looking a little farther back in history than ~150 years. You will find plenty of examples of civilizations that faced a crisis, failed to overcome it in spite of all efforts, and collapsed."

Sure, but did they have the social institutions and norms like we do now? I doubt it. You make it sound like they could try anything and everything when their social insitutions might very well have prevented finding and/or implementing the solution.

A good example of what Steve is talking about. All the energy in the world isn't going to help me live a thousand years.

After 5, 10, or however many years is needed to show how much of a non-event "peak oil" will be, I'd love to know what the Malthus, Ehrlich, Kunstler etc. crowd will come up with as the next thing that can't possibly be solved without a massive government takeover of the economy.

Oh please. Not it is NOT. Lets also add labor and human capital. You don't from flint tipped spears one day to cars, jets, and cell phones the next. Is energy important, sure who has argued otherwise? Nobody. Is it the most important factor, no? Not if you mean that it is the only factor that is necessary.

Economy is a system, afterall. And it obeys physics. You always transform energy, no matter how much labor or capital you use. In fact every time you use human labor or accumulate capital you use/store ENERGY. It is an enabling factor as important as the other two.

Again, you are saying the market not only efficiently allocate goods, it will SOLVE almost any resource problem. That's a bold statement.

Risk management and mitigation are not needed anymore?

Karl: Do you know why we humans find sweet and creamy things extremely pleasurable??? Because they're full of energy.

This is interesting:

PEAKING OF WORLD OIL PRODUCTION:
IMPACTS, MITIGATION, & RISK MANAGEMENT

http://www.hilltoplancers.org/stories/hirsch0502.pdf

FoxNews earlier, possibly CO, UT and WY(?) might have enough shale equal to 1 trillion barrels of oil, more than the ME if we can get to it????

Again, you are saying the market not only efficiently allocate goods, it will SOLVE almost any resource problem. That's a bold statement.

Again not true. I'm saying that the market has had a good track record. Hence we shouldn't rule out the market simply because we don't have perfect foresight.

As for energy, human capital, and labor, I'm gald you backed off a bit on the energy part. I agree it is important, but energy is not the only factor. Also, based on your comments I don't think you fully grasp the concept of human capital. We also call it knowledge. All the energy in the world wouldn't help a man from 3rd century BC create a computer.

Fernando, you wrote

Karl: Do you know why we humans find sweet and creamy things extremely pleasurable??? Because they're full of energy.

Actually, isn't that the other way around? We evolved so that we experience pleasure when we eat certain kinds of high energy foods. After all, we don't get the same effect from tasting motor oil. It's full of energy, but toxic to us.

Also, my take here is that markets may not "solve" the ending of the high degree of fossil fuel dependency, but they are the best tools for the job. Further, they appear to be working just fine despite the high level of interventions by governments and other parties.

Years ago I invested in the Oil Shale Corp (Now Tosco) They and others spent lots of energy and money but failed to produce oil from this stuff. One company even used nuclear explosions. (Google Youngquist). OSC almost went bankrupt but survived as they owned a valuable refinery that could handle bad grades of oil.

After all, we don't get the same effect from tasting motor oil.

Now, don't cast stones, Karl. It's just an acquired taste.

Indeed, apostropher. It's a taste you can acquire for $24.95!

Karl,

I didn't want to insult your intelligence clarifying that humans beings don't eat motor oil.

Ok. Your take here is that markets are the best tool for the job. That's a bold statement, too.

Antway, for free-market believers, the market will be "the best tool", always.

If markets didn't work it would be because goverment intervention.

If markets did work it would be despite government intervention.

Bullet proof logic.

Again not true. I'm saying that the market has had a good track record. Hence we shouldn't rule out the market simply because we don't have perfect foresight.

Ok. Then that's what you're saying.

Let me see if I understand. It follows then that if we didn't have perfect foresight then we would allow the market alone solve the problem?

Or what percentage of certainty would you consider "perfect foresight"?

As for energy, human capital, and labor, I'm gald you backed off a bit on the energy part. I agree it is important, but energy is not the only factor. Also, based on your comments I don't think you fully grasp the concept of human capital. We also call it knowledge. All the energy in the world wouldn't help a man from 3rd century BC create a computer.

I didn't back off!

Information (knowledge) is a manifestation of low entropy energy. This low entropy energy was created inside a closed system (Earth). Total universe entropy increased.

So we can say that all the energy in the world (Sun, in fact) delivered during a fair amount of time allowed men from 20 century to create computers.

Please, I would like to know if you can inform me about an activity that doesn't require energy.

Fernando